In a fast-moving transaction, Chipotle Mexican Grill has inked a 15-year ground lease for a vacant restaurant site in Victory Lakes Town Center, a nearly full 750,000-sf regional power center on the Gulf Coast side of Interstate 45 in Galveston County.
The NewQuest Properties-developed Victory Lakes Town Center is positioned at the kissing point of one of the strongest intersections in League City – I-45, also dubbed the Gulf Freeway, and FM 646. Chipotle has scooped up an interstate-fronting site, previously occupied by El Pollo Loco.
Chipotle plans to open by year's end. Poised for an extensive renovation, the 2,660-sf building, which includes a drive-through lane, is situated on a 0.74-acre pad with direct access to Town Center Drive, an interior road bisecting the NewQuest project. The site is tucked between Starbucks and Spring Creek Barbeque.
"One of Chipotle's main goals in working this deal so quickly was to be open by the end of the year," says Kevin Sims, associate of Houston-based NewQuest Properties. He and colleague Brett Strake, also an associate, represented the landlord in the ground-lease negotiations, which went full circle in four months.
The Victory Lakes site fills a hole in the market for Chipotle and falls in line with a new store design embracing drive-through service. Jason Baker and Traci Holman of Baker Katz represented the Southern California-based chain.
"We had a lot of interest in the property. Chipotle was a natural fit to backfill this vacancy because it's now doing drive-through," Sims says. "It's a strong nationally recognized brand that provided a high probability of quickly getting this transaction completed."
Victory Lakes Town Center is the main and main for retail and dining in League City, one of the Top 30 fastest-growing cities in the U.S. Occupancy is pushing 100%, a credit to NewQuest's foresight in the mid-2000s in developing a 60+-acre power center along the most direct route between Houston and the Gulf Coast.
NewQuest sold part of the built class A space nine years ago, but held onto multiple pad sites for future development. Today, the available inventory has been reduced to a 3.14-acre tract and a 6,500-sf medical office building.
"We have deals working on the vacancies," Sims says. "This area has an extremely high daytime population, which is crucial for restaurants like Chipotle and other tenants."
The League City intersection has retail-driven developments on three of its four corners. Victory Lakes represents a $1.9 billion powerhouse for retail trade and dining. Located within the power center are nationals like Walmart, Lowe's, Best Buy, Hobby Lobby and JCPenney. Cabela's is directly across the interstate. A University of Texas Medical Branch campus abuts the power center and a 13-acre Memorial Hermann Convenient Care Center is practically on its doorstep.
Numerous single-family communities, ranging from 475 to 1,277 lots each, encircle the dense concentration of retail, restaurants and medical services. The average household income is $110,000 per year within the two-mile trade area, where the population has climbed 34% since 2010. There are 134,000 residents living within a five-mile radius of Victory Lakes Town Center.
SOUTH TEXAS LEASE
Chipotle Mexican Grill has leased a 2,660-sf restaurant building on a 0.74-acre pad site in Victory Lakes Town Center, located at the intersection of Interstate 45 and FM 646, League City, from NewQuest Properties. Kevin Sims and Brett Strake of NewQuest Properties represented the landlord. Jason Baker and Traci Holman of Baker Katz represented the tenant.
SOUTH TEXAS SALE
Kimberlee Partners LP has purchased a 2.78-acre ground lease and 24,128-sf building, leased to Service King, at the intersection of TX 249 and Boudreaux Road, Tomball, from Blex Exchange II LP. David Luther of NewQuest Properties represented buyer. The seller was self-represented.
NewQuest Properties, founded in 2001, is a privately owned, full-service commercial real estate firm specializing in development, land brokerage, leasing, tenant representation, investment sales and property management services. Headquartered in Houston, NewQuest owns a portfolio encompassing more than 60 retail and mixed-use projects valued at $2.2 billion and provides leasing services for more than 12 million square feet of commercial space in Texas, Louisiana and throughout the U.S.
